Hubert Senters here.
Let’s take a look at Starbucks. And most of you guys know that I’m a huge fan of Ichimoku because it gives me an edge. I can look at the chart in less than 3 seconds.
And tell you which way it’s probably going up or down so obviously the first rule on Ichimoku and trend analysis is if it’s above the cloud then you probably want to get long. That didn’t always workout for you though.
So if we’re looking at this situation here it’s above the cloud but you can see this is a consolidation period. And then this is a consolidation period.
So the next tool that I like to use is an ADX so what I’m going to do is I’m going to remove the Ichimoku. I’m going to go right click format analysis.
And I’m going to remove that statuses off. And then status. And we’re going to talk about why you should use ADX for trend analysis to. It’s a FREE indicator.
I use a 14-period. You can use whatever you want. I’ll show you the difference between a 7. But here’s a general rule for this thing.
And then you can use this on a bunch of different markets no matter what you trade and it’s also really good to tell you when something is trending.
If it’s in trend mode it will tell you the direction. That’s what we’re going to use Ichimoku for. But it will tell you if it’s in a trending mode.
In other words if it’s happy or if it’s pissed off at you. So the rule that I use is follows. Let me grab the pen.
An ADX reading. ADX reading of greater than $20 or above means that the thing is happy and it wants to go places.
Now, it may want to go places up. It may want to go places down or it may want to go places up but that’s what it’s going to tell you.
So right here as you see the ADX. This is the $20. The $20 line is the green line. When it goes below $20 right here that’s going to tell you hey, you might want to mess with me right now.
And then it’s going to experience right here. Now, I’m happy. I’m going to trend some. When the yellow line goes above the green line.
And then it’s going nope, I’ve changed my mind. I’m still pissed off. I don’t want to trend. I want to chop.
And now, Starbucks has reversed and now it’s happy and it wants to trend. In this situation, it’s going substantially higher.
So the first thing you want to do is add an ADX and then you could fiddle with the settings that you want to make it faster or more reactive.
I use a 14 but you can also use a 7. And it will speed things up for you here and you’re going to see you’ve got more opportunities there.
But like I said I like a 14 just because it works out good for me but you can obviously mess with the default settings if you want to.
So the first thing is your thing above or below the cloud. Second thing is it is trending?
If the ADX is below $20 it’s probably not trending. If it’s above $20 it’s probably trending you’ve got a higher chance of making some cash if you get the direction right.
Silas Peters is going to be doing a special webinar on Price Actions Secrets To Follow The Big Money Footprints.
They’ve got one that’s happening right now at noon while I’m recording this video. After the one that happens at noon today they’ll update that and it will be right date.
It’s July 27th Tuesday at 2PM EST. In order to register for the webinar all you got to do is click this button right here just CLICK HERE TO REGISTER.
Little pop up is going to get you. It needs your first name. It needs your primary email address. It needs you cellphone so we can either voice call or text you and go hey, webinar starting in 15 minutes.
Good luck. Hope it helps. See you on the next video.
Hubert.
